Key differences between retained executive search and contingency recruitment agencies

Like any industry, recruitment has its own terminology and buzzwords. These words, when used without context, can often cause confusion for those simply trying to invest in the best service and compare like with like. 

Retained executive search

Contingency recruitment company

Also known as: Executive search, search and selection, retained headhunters

Also known as: High street recruiters, hiring agency, recruitment agency, contingency firms

Retained search companies are contractually bound by their terms and conditions, which document what clients can expect at each stage in the recruitment process.

Contingency firms are under no contractual obligation to produce results due to their fee arrangement.

Search companies work proactively on behalf of their clients. The relationship will be consultative and advisory. They will work with their client to create an assignment specification that engages and entices candidates who have been identified through a targeted headhunt process. 

Contingency firms work re-actively. They are transactional and sales-driven. Their focus will be around matching CVs from a database or advert against key buzzwords within the clients job description.

A targeted approach takes time due to its research focus but it will require minimal HR and management involvement until interviews begin.

Contingency recruiters will be a lot quicker and most probably deliver more CVs in order to increase the odds of making a placement. This still requires a significant investment of time from the company’s HR team.

Recruitment activities are investment and quality driven, in terms of consultant’s time, research activities, engagement with candidates and clients financial commitment.

Recruitment activity is cost, speed and quantity driven. Payment is based on results, therefore there is a need to get to the end point as quickly as possible without incurring costs. This means less time can be invested in individual assignments by consultants.

Ethical practices including the guarantee of confidentiality and assignment exclusivity are key reasons companies choose executive search.

Confidentiality can be compromised as there is a need to engage with as many candidates as quickly and cost effectively as possible. Candidates may be presented to multiple organisations and multiple agencies may present the same candidate.

Consultants will commit a significant amount of time from the outset, listening to clients to fully comprehend their objectives, address any challenges they’ve experienced and understand the culture of their organisation.

Usually agencies will work from a brief or job description. They may not have met the client they represent.

Partner clients can be SMEs through to global organisations who are looking to appoint leadership and business critical executive positions.

Typically, agencies will work to fill mid or low level opportunities or they will work with candidates to register them on their database.

Specialist focus - well networked with a good understanding of their sector, the associated roles and candidate market.

Generalist focus - where consultants are reliant on candidates applying to adverts or being sourced from a registered database.

Consultants are experienced, they act with gravitas, sensitivity, creativity, tenacity, and objective judgment.

Contingency is often less experienced and usually offers a route to executive search.

Consultants will invest at least 80 hours a month per client assignment.

Recruiters often work concurrently on multiple assignments.

Invest time to identify and engage with quality candidates (individuals who may not be active job hunters). These individuals will specifically match the client’s requirements.

Unable to invest time on the hidden candidate market. The focus is on quantity and they only interact with those individuals in the job market.

Consultants are keen to engage with leadership level candidates in their specific sector as it enhances their network.

The quantity of candidates approaching consultants and applying for roles makes it difficult for consultants to respond to all applicants. This can create an atmosphere of resentment and may alienate candidates.

Customer services and feedback provided by consultants ensures a good impression of the company the consultant is representing.

The candidate can be left with a negative view of the hiring company because of the lack of feedback and interaction.

Throughout identification and engagement phases, consultants will look to add value by providing management information to the client (e.g. benefit packages, employer brand perception, any issues affecting the company’s ability to recruit).

Focus is purely on filling the role with no guarantee of payment for services performed. The consultant cannot invest any time beyond basic recruitment.

Additional profiling / psychometric tools may be used to assess candidates providing clients with further insight into their behaviours/traits and motivators.

Candidate assessment will be made purely on CV and interview ability of candidate.

Consultants will meet face-to-face with a longlist of candidates prior to presenting their shortlist. They will understand the candidate’s skills, competencies, behaviours and objectives for wanting the role.

Consultants may not meet with every candidate they present to the client. They will fit the role based on a CV match and phone conversation.

Consultants will provide a detailed outline on each shortlisted candidate; interview report, CV, profile report. The information acts as a support throughout the client's interviews.

CVs will be presented for the HR department to evaluate.

Consultants will manage the feedback to candidates in a delicate and sensitive manner, providing advice that helps the candidate with future recruitment activities and also reflects well on the client company.

Consultants typically provide little feedback to candidates other than success or failure.

Consultants manage contract negotiations, provide advice on counter offers, relocation, etc. They can act as a sounding board and welcome buffer between client and new employee.

Consultants will manage contract negotiations between the client and candidate.

Consultants provide ongoing support and communication to clients and candidates throughout notice periods.

Due to the typical role level, notice periods are not protracted and therefore do not require on-going support.

Executive search companies will provide post-placement reviews with clients in order to continually improve their service and feedback findings on the assignment.

There is no further need for this service until another role becomes vacant. The consultant is unable to add value post placement.

Typically, fees are fixed or a percentage of salary is invoiced in stages – research, shortlist and placement fees.

Paid on success only, based on a percentage of compensation – invoiced on start date.

 

REader's of this blog also read

WHEN SHOULD YOU ENGAGE WITH A PROFESSIONAL EXECUTIVE SEARCH FIRM?

HOW TO SELECT A RECRUITMENT PARTNER TO SUPPORT YOUR BUSINESS

WHAT INVESTMENT IS NEEDED IN EXECUTIVE SEARCH TO REAP YOUR SOUGH ROI?

Comments (1)

  • IT Consultant Avatar

    IT Consultant

    Extremely well written post and nicely explained the difference between the two types of recruitment agencies.

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